Arizona Real Estate License Practice Exam 2026 - Free Real Estate Practice Questions and Study Guide

The principle that explains why a property's value may be less than that of similar properties due to its condition is known as regression. This principle illustrates the concept that when a property is located in a neighborhood of higher-valued properties, it tends to lose value because of its inferior condition relative to those properties. The basic idea behind regression is that the presence of better-quality properties in close proximity can negatively impact the perceived value of a property that is not maintained to the same standard.

When a property is lower in quality or condition compared to comparable properties, potential buyers or appraisers may view it less favorably, leading to a decrease in market value. This principle highlights how external factors and the condition of a property can affect its worth in the real estate market. In contrast, other principles like progression refer to the opposite scenario, where a property of lesser value is uplifted by being in a neighborhood with higher-value properties. Conformity emphasizes that properties generally achieve maximum value when they are consistent with those in the surrounding area. Contribution focuses on how specific improvements add value to a property. Each principle plays a role in determining real estate values, but regression specifically addresses the negative impact of condition on property value.